Unleash the full potential of your business in the digital world

Urban Decay in Post AI-ERA

James Huang | 2023.03.30


The centuries-old debate over whether form follows function or function follows form continues to be a topic of discussion. Architects and engineers have split in their pursuit to design cities following either the modern or the deconstructivist perspective since the 18th century. American skyscraper architect Louis Sullivan advocated for the former, arguing that every building's shape should adapt to the form its interior serves. In contrast, Frank O Gehry, Rem Koolhaas, and Daniel Libeskind mastered the art of fitting any interior function into iconic buildings. With the rise of modern technologies, the form-function debate is resurfacing over human needs and behavior, and whether one can simply delink form and function given the flexibility of new technologies.

The smart city, sometimes called intelligent, virtual, or digital city, has been a vision for much of the 19th century rejuvenating the form-function debate. Smart cities are defined as cities in which information and communication technology (ICT) is merged with traditional infrastructures, coordinated, and integrated using new digital technologies. ICT is tackling the wicked problems of urban operations, management, planning, development, and governance.

Artificial intelligence, like many revolutionary technologies in human history, will have a profound impact on societies. But the impending fourth industrial revolution will be different from the first three: AI will have a profound impact on us as human beings. AI here refers not only to data analytics and machine learning, which are experiencing a great hype due to the recent advances in deep learning but also to its next installment: general-purpose AI or machines that think like you and me, or even exceed our human abilities. These machines do not only answer the question if we are alone in the universe—for sure not anymore—but may be a major threat to our socio-economic systems: AI makes human labor obsolete, which has traditionally attracted humans to cities.

The Future of Work

AI is expected to transform the nature of work radically. As several independent research projects by Oxford University, CitiBank, and McKinsey & Company have recently shown, close to half of the current occupations are highly vulnerable to technical automation. For example, McKinsey examined 2000 work activities across 800 occupations and found that 47 percent of these tasks are automatable by simply adapting existing technology. McKinsey further found that 1/3 of all tasks from 60% of all occupations can be automated already. This study demonstrates the impact of AI on potential job displacements and job loss. Assuming current technology trends continue, future technology will exponentially increase these work replacement predictions.

Of course, technical automatability does not translate into mass-scale automation overnight, as several other factors affect the outcome. These include economic viability, necessary investments, labor rates, regulatory frameworks, and cultural influences. However, these research projects expect a gradual mass acceptance and adoption of many of these innovations in the coming years. It is also worth noting that automation is expected to bring significant benefits, such as improved labor productivity, safety, as well as higher quality of products and services. If our history of prior revolutionary technologies is any indication, the eventual net impact on society is likely to be positive if benefits are equally distributed.

As AI transitions into our lives, it will have a profound impact on cities. Throughout modern history, cities have been the hub of economic activity and the locus for many occupations, but have also undergone economic shifts toward specializations. Today, many cities focus on a select number of industries: think of the role the finance sector plays in New York City, Pharma and R&D in New Jersey, technology in Silicon Valley and San Francisco, and so forth. What would happen to these cities and localities if and when a vast majority of occupations in any of these industries begin to go through radical transformation due to AI and automation?

Today, all trends lead to downtowns becoming more work-focused, cities are being equipped with skyscraper infrastructure, and redesigned to accommodate additional people, but what work remains for humans to do in cities?

On average, the number of working hours has decreased over time, while wages have either increased or stayed at similar levels. This is a trend that is likely to continue and even accelerate with the mass-scale adoption of AI and automation technologies. As our work hours get replaced over time with leisure or non-work hours, which functions will cities have? Why do we live in or commute to cities if not for work? Current publications take the fundamental functions of cities and their inhabitants for granted and predict ever-increasing urban populations. Given the future of work and its implications on working hours and leisure time, I think urban dynamics will change dramatically and are not as clear-cut as current views portray them. AI might change the function of cities through different levers.

New in/out Migration Pressures

Population pressures may lessen on cities unless cities take on new functions that replace work. With the advent of AI, real questions arise about whether the other benefits of cities, like entertainment and education, will be enough to keep cities as centers of human gathering. The Harvard economist Lawrence Katz predicts cities will become arts and cultural hubs, creating a local artisanal economy. However, this type and kind of spending have been historically cyclical, depending on households' disposable incomes. If middle-income jobs are replaced by AI, spending will concentrate on food, housing, transportation, and healthcare, or the middle-income class may leave cities altogether when cities become unaffordable as property taxes outpace income growth.

For much of human history, socialization was associated with geographic proximity. With technology, geographical proximity is no longer needed. The internet provided connectivity, but when robots take over human-like functions, seniors may withdraw from city life. As the wealthy age across cities, they may seek nature and solitude as the surrounding technology enables human closeness via AI.

Economic Reasons

Among other things, cities have been economic hubs for much of human history. Technological disruptions have historically replaced some spaces by making products or services available digitally, e.g., travel agencies. AI will be no different but much larger in scale and impact. It will drive people away from cities because the 4th industrial revolution will replace desk jobs, just like the third replaced human labor (Car Industry in Detroit). Unemployment will rise in the short run that causes urban blight and homelessness. Cities traditionally have provided support for the homeless. If the homeless become overwhelming for a city to serve, a local crisis may ensue.

A further economic angle to consider is "information asymmetry" that provides a competitive advantage for companies that use AI. Information asymmetry means companies collect data to model and predict "our" decisions that we as customers cannot. This information asymmetry allows companies to increase prices for individuals at certain times using information about human preferences.

Economically, we might be in the midst of creating a local bubble in cities that backfired as a minor recession during 2009/2010 when the housing bubble burst. The AI bubble, however, is larger in scale, encompassing work, housing, and retail—all things that attract humans to cities.

New Social-Human Dynamics

If work ceases to exist, human nature will demand some other exploration mechanisms. Since the beginning of time, humans have been drawn to challenging environments. The very idea of AI is to give boring tasks to machines, so humans have time for more meaningful interactions and creative endeavors. In the beginning, AI is slated to replace mundane tasks. As AI evolves, it will take over problem-solving and cognitive functions, leaving humans with tasks that foster instant instead of more meaningful delayed gratification. In turn, this creates places that may be more unhappy as it becomes too easy to accomplish something meaningful in cities.

Many people define their purpose in life through their work, which is closely coupled to their economic success. But if work ceases to exist, humans will need to find an alternative purpose. Some of us, who are drawn to challenging environments, will deepen their sense of exploration and education. AI will free these people from mundane tasks and can even be used to create new challenges. Some of us prefer entertainment and leisure. It is easy to imagine how an oversimplification of our lives together with AI could lead to degeneration: the movie Wall-E depicts such a strange but possible future.


How will cities look in the future? Artificial intelligence may turn our metropolises into ghost cities, and the future of cities is far from being a determined one. Whether or not cities turn into ghost cities depends on the rate of AI adoption, policy regulations, and other unpredictable events, such as COVID-19.

Urban Decay in Post AI-ERA
Share this post
Why ChatGPT is a Better Boyfriend Than Me